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Three trends are currently driving the global electricity sector: decarbonization, decentralization and differentiation. Utilities are making significant contributions to mitigate carbon emissions, while a technology revolution is …

EU ‘must spend €1 trillion’ on energy infrastructure

The European Union must spend €1 trillion by 2020 on upgrading its energy infrastructure if it is to meet its climate-change goals, according to a leaked report from the European Commission.

The figure is the first estimate from the Commission on the cost for the EU of achieving its target of getting 20% of energy from renewable sources by 2020.

A big influx of renewable energy will put huge demands on the ageing grid system. The Commission report, due to be published in late October or November, states that the current system will be unable to cope. “Europe is still lacking the infrastructure to enable renewables to develop and compete on an equal footing with traditional sources,” it says.

Storage capacity

The 2020 target means that one-third of electricity is expected to come from renewables, meaning that the grid system will have to cope with fluctuating input from wind and solar energy.

Investment will be needed to ensure sufficient energy storage capacity, to balance supply and demand and avoid black-outs, as well as financing new grid interconnections across borders.

The Commission doubts that this vast sum will come from private companies alone and promises “innovative funding mechanisms” to ensure that crucial pan-European projects go ahead. A strategy from the Commission will be drawn up to identify projects of European interest that deserve public resources and a fast-track permit process.

The paper drops a strong hint that the Commission will seek more money for infrastructure projects in the next EU budget, with a reference to the requirement for “additional resources under the next multi-annual financial framework”.

The draft paper takes a overview of the EU’s energy goals for the next decade and warns of serious gaps in delivery.

It says that national governments’ performance on energy efficiency has been “discouraging”, the switch to renewable fuels in transport is “happening too slowly” and that, despite the “wake-up call” of gas-supply crises, “there is still no common foreign policy approach towards partner supplier or transit countries”.

The policy paper calls for more political backing for energy efficiency, faster work on green-technology projects, better implementation of internal energy market rules, and extending EU energy rules to neighbouring countries, such as Ukraine and Turkey.

A report from the European Climate Foundation earlier this year suggested that spending on energy infrastructure would add up to €2 trillion-€3 trillion over 40 years.

However, the group warned that climate-change targets would be harder to meet if serious investment in the energy system did not get under way in the next five years.

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